Support is growing for controversial changes to the repayment of university loans, with an influential group of universities throwing its support behind the collection of HECS debts from deceased estates.
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The Regional Universities Network (RUN) also backs the introduction of a new household income test for HECS debts in a submission to the government on higher education reform.
The change, described by the respected Grattan Institute as "radical", would see part-time workers or graduates who take time out of the workforce forced to pay back their loans if they have a wealthy partner.
The Turnbull government has called for submissions on the future of Australia's higher education system after releasing a policy options paper alongside the May budget. It went to the election without a set higher education policy, but has ruled out fully deregulating fees.
As well as recovering HECS from deceased estates and introducing a new family income test, the paper proposed the creation of a new tier of deregulated "flagship courses" that would allow universities to set their own fees.
But the RUN - representing Central Queensland University, Federation University, the University of Southern Queensland, Southern Cross University, the University of New England and the University of the Sunshine Coast - said it does not support flagship courses.
"RUN is of the view that flagship courses as proposed in the discussion paper could not work to any significant extent in regional universities," its submission says.
"Such a scheme may be viable for a few, high demand courses, particularly in elite universities.
"However, in an environment where there is a significant reduction in Commonwealth Grant Scheme (CGS) funding, and no other source of funding to replace this, regional universities would not be able to recoup significant funds via flagships."
A 20 per cent cut to university funding - originally included in the 2014 budget - remains baked into the budget despite being universally opposed by universities.
Fairfax Media revealed earlier this year that the Turnbull government was considering collecting student debts from the dead as it seeks to find higher education savings.
Former education minister Christopher Pyne backed the idea of recovering HECS from deceased estates two years ago, but was quickly shut down by then prime minister Tony Abbott to avoid a scare campaign on the sensitive issue.
RUN executive director Caroline Perkins said, in the context of a tight budget, it was "reasonable" for HECS debts to be recovered from deceased estates.
"Most other debt is not forgiven when someone dies," she said, pointing to mortgage and credit card debt.
She said it makes sense to tie HECS repayments to family income given some graduates earning below the repayment threshold have partners earning very high incomes.
Fairfax Media understands there is broad support for such changes across the higher education sector, which sees tightening up HECS as preferable to cuts to research and teaching funding.
Grattan Institute higher education program director Andrew Norton has said it would be complicated, but fair, to tie HECS repayments to household income.
"They have a partner and many live in reasonable affluence," he said of many graduates not repaying their debts.
"For many of them, their partner's income explains why theirs is below the threshold: they do not need to earn more to maintain high living standards".
He said a family income test would only include a couple's joint income and would not be targeted at graduates living with their parents.
The independent Parliamentary Budget Office projects the total value of the student loans program will balloon from around $60 billion now to $180 billion by 2026.
The regional universities urged the government to be cautious on its proposal to reduce the HECS repayment threshold from around an annual income of $54,000 currently to $40,000-$45,000.
"Many students at RUN universities are mature-aged and part-time, and care needs to be taken that the threshold isn't so low that it is triggered while students are studying," its submission says.
The universities also call for an overhaul of government-supported postgraduate places to focus on areas of skills shortages and expanded support for diploma places at universities.
